Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2015

Sales and Use Tax Annotations

295.0000 GROSS RECEIPTS

Annotation 295.1479

(g) SERVICE CHARGES GENERALLY

See also Service Enterprises Generally. Engineering, design, research and production, charges for, see also Service Enterprises Generally.

295.1479Administrative Expense Charges. An out-of-state retailer is registered with the Board for collection of California use tax. The retailer adds a separate charge on the customer's invoice for administrative expense. This charge represents a recapture of the retailer's administrative expenses associated with the invoice (sale). The charge is calculated as a percentage of the merchandise amount on the invoice. The "sales price" includes all charges for labor, service, and administrative costs associated with the sales of the property, including administrative expenses associated with the invoice. Accordingly, the taxpayer's recapture charge is subject to California tax. 11/26/96.